Updated September 3, 2026. Quick answer: Missouri State Employees’ Retirement System (MOSERS): the COLA is automatic and it compounds up to a lifetime cap, service credit can be purchased, and MOSERS runs a program it calls “BackDROP”. Vesting takes five years for general state employees.
Missouri’s transportation and highway patrol system runs on separate rules: Missouri MPERS retirement decisions.
Employees of the City of St. Louis and the City of Kansas City, Missouri belong to separate city systems with their own rules: St. Louis Employees Retirement System decisions and Kansas City employees retirement decisions.
A third Missouri system with its own decision page, LAGERS for local government employees: Missouri LAGERS retirement decisions.
Provisional. This page is published at medium confidence. The specific points that could not be confirmed are listed under What could not be verified below, and are named rather than smoothed over.
The verdicts
| Is the COLA granted? | Automatic |
|---|---|
| Is the COLA compounded? | Compounded (until lifetime cap) |
| Vesting | 5 years (general state employees) |
| Buy service credit? | Yes |
| DROP? | Yes (called “BackDROP”) |
| State | Missouri |
Those first two rows are separate questions and are routinely confused. Whether you get an increase at all is one thing; whether it compounds is another. A system can grant an increase automatically every year and still compute it against your original benefit forever, which is a materially worse deal than it sounds.
The COLA
“MOSERS provides annual cost-of-living adjustments (COLAs) to retired members and their surviving beneficiaries.” For retired general state employees, “COLAs are based on 80% of the percentage increase in the average Consumer Price Index (CPI) from one year to the next.” “A COLA can range from a minimum of 0% to a maximum of 5%.” Pre-8/28/1997 MSEP retirees have a higher floor: “you will get a COLA of at least 4% each year (maximum 5%) until you reach your COLA cap.” They reach the COLA cap when the sum of their COLAs equals 65% of their initial benefit amount. The 2025 COLA was 2.359%; the 2026 COLA is 2.152%.
Buying service credit
MOSERS members can purchase up to 4 years of active-duty military service (not available to MSEP 2011/Judicial Plan 2011 members) and up to 4 years of prior non-federal public employment “at a reduced rate,” once vested and actively employed. Payment is by lump sum, installments (“interest will be added to the cost of purchase”), rollover, or a combination.
Run your own numbers before deciding: some purchases never recover their cost, and the calculator shows which.
Coordinate this with your overall retirement plan
An adviser can help weigh a COLA that may not compound, a service-credit purchase that may never pay for itself, or a DROP election against the rest of your retirement plan, but that does not replace the numbers in your own member statement.
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Vesting
“As a general state employee, once you have worked for 5 years in a MOSERS benefit-eligible position, you are vested.” Vesting means: “You are eligible for a future pension benefit.” MOSERS states that this eligibility continues even if a member leaves state government before reaching their plan’s retirement age. The source page did not break out MSEP/2000/2011/Judicial plan-by-plan distinctions, so this figure is reported for general state employees only.
DROP
MOSERS runs a genuine DROP-class program under its own name: “The "DROP" in BackDROP stands for Deferred Retirement Option Provision. If you are eligible, it is a choice you will make at retirement. With BackDROP, you can get a one-time lump-sum payment in addition to your monthly pension payments from MOSERS.” It comes with a tradeoff: “Choosing BackDROP will, most likely, reduce the amount of your monthly benefit.” It’s restricted to general state employees in MSEP/MSEP 2000 who work at least 2 years beyond normal retirement eligibility; the lump sum equals 90% of what pension payments would have been paid during the BackDROP period.
DROP is rarer than it appears across the systems on this site: most have none.
Choosing a benefit payment option
MOSERS opens its payment options page with the rule that governs every choice: “The election of a benefit payment option determines whether or not a benefit will potentially be paid to anyone after your death.” The same page adds that “Regardless of the payment option you elect, you will receive a monthly benefit payment for your lifetime.”
Which options exist depends on the plan. MOSERS says “Your plan is automatic, depending primarily upon your dates of employment and vested status.” It then says “Except for the Judicial Plan, which is automatic, you will elect one of these benefit payment options at retirement.” MSEP, MSEP 2000 and MSEP 2011 each list a Life Income Annuity, a Joint & 50% Survivor option and a Joint & 100% Survivor option, plus two Life Income with Guaranteed Payments choices. An Unreduced Joint & 50% Survivor option appears only for MSEP and the Judicial Plan.
The Life Income Annuity is the simplest. Of it MOSERS says “No ongoing monthly survivor benefits will be paid to anyone after your death.” For a married member the page adds “If married, your spouse must give consent by signing your Retirement Election form.” For the general consent and survivor trade-offs, see spousal consent to waive a joint and survivor annuity and single life versus joint and survivor pension. For MSEP 2011 and Judicial Plan 2011 members, MOSERS also says that if the member dies “before receiving retirement benefits equal to the amount contributed during your active employment”, the beneficiary on file receives the remaining amount.
The survivor options come with a reduction. For the MSEP Joint & 100% Survivor option MOSERS gives a formula: “The reduction is 7% plus or minus 0.3% for each full year your spouse is older or younger than you (minimum 4%).” The page says the spouse then receives “100% of the benefit amount you were receiving at the time of your death.”
The guaranteed-payment options work differently. MOSERS says “A certain number of payments are guaranteed from your retirement date.” It also says “The guarantee starts on your retirement date (not date of death) and extends for the term you elect.” The MSEP reductions are 3% for 60 guaranteed payments and 9% for 120. For MSEP 2000, MSEP 2011 and Judicial Plan 2011 they are 5% for 120 guaranteed payments and 10% for 180. A limit applies: “No survivor payments will be paid if you have received all payments in the guaranteed period (other than the final payment).”
A computed example shows what a stated percentage does to a check. A computed example from an assumed $2,000 monthly benefit, not a MOSERS figure: an MSEP member choosing Life Income with 120 Guaranteed Payments faces a 9% reduction. The formula is 2000 multiplied by 9 divided by 100, a computed reduction of $180 a month, which leaves a computed monthly benefit of $1,820.
| Option | Figure | Where MOSERS states it |
|---|---|---|
| MSEP, 60 guaranteed payments | 3% reduction | MOSERS benefit payment options page |
| MSEP, 120 guaranteed payments | 9% reduction | MOSERS benefit payment options page |
| MSEP 2000, 2011, 120 guaranteed payments | 5% reduction | MOSERS benefit payment options page |
| MSEP 2000, 2011, 180 guaranteed payments | 10% reduction | MOSERS benefit payment options page |
| MSEP Joint & 100% Survivor reduction | 7% plus or minus 0.3% per year of age difference, minimum 4% | MOSERS benefit payment options page |
What the pages read do not state: the Joint & 50% reduction percentage for MSEP 2000, MSEP 2011 and Judicial Plan 2011, the reduction for the Joint & 100% option in those plans, whether the election can be changed after retirement, and the amount of any temporary benefit. The MOSERS counselors and the retirement election form are the places to confirm those numbers.
Sources for this section:
- Missouri State Employees’ Retirement System, mosers.org benefit-payment-options: https://www.mosers.org/members/pension/benefit-payment-options
- Missouri State Employees’ Retirement System, mosers.org backdrop: https://mosers.org/members/pension/backdrop
BackDROP: the lump sum and the monthly trade-off
The DROP section above covers who qualifies and the headline lump sum. The MOSERS BackDROP page also describes how the election is made, the three payment choices, the effect on the monthly benefit, and the tax treatment. On the election, MOSERS says “You will make your choice to take BackDROP or not on your Retirement Election form during the retirement process.” It adds “If you elect BackDROP, you will also choose your payment option.” It also says “You are not required to take BackDROP.”
The page names three ways to receive the lump sum: “You have three options for your BackDROP lump-sum payment.” The cash option, the page says, “is one lump-sum payment at retirement.” For the rollover option MOSERS says “We will send your tax-deferred distribution directly to a qualified employer plan.” The combination option splits the lump sum between cash and rollover.
The calculation is stated as “The lump-sum payment is equal to 90% of the pension benefits (based on the Life Income Annuity option) that you would have received during the BackDROP period had you been retired.” The page lists what the amount includes: temporary benefit, cost-of-living adjustments, outside service credit and other benefit increases if applicable. On the temporary benefit MOSERS says it “stops at age 62”. The maximum period is stated as “The maximum BackDROP period is five years.”
A computed example makes the 90% concrete. A computed example from an assumed $1,500 monthly Life Income Annuity benefit over an assumed 36 month BackDROP period, not a MOSERS figure: the formula is 1500 multiplied by 36, a computed $54,000, then multiplied by 90 divided by 100, a computed lump sum of $48,600. The example leaves out temporary benefits and COLAs, which MOSERS says are part of the real calculation.
The cost shows up in the monthly check. MOSERS says “Choosing BackDROP will, most likely, reduce the amount of your monthly benefit.” The reason is stated: “We will not include any service credit or pay (including pay increases, overtime, etc.) that you earn during your BackDROP period to calculate your monthly pension payments.” The page also says “You may be able to increase your monthly payment by not electing BackDROP or by electing a BackDROP period of fewer years.”
On taxes, MOSERS says “the BackDROP distribution is considered taxable income for the year in which you receive the payment”. For cash it says “MOSERS is required to withhold 20% of the taxable portion of any cash distribution for federal income tax”. It warns that “the IRS may impose an additional 10% early distribution income tax penalty” for cash taken before age 59 and a half that is not rolled over. A separate exception is described: “if you terminated employment during or after the year you turned age 55, you may avoid the 10% penalty”. For how that withholding works in general, see the 20 percent withholding page.
| Item | Figure | Where MOSERS states it |
|---|---|---|
| Share of benefits paid as the lump sum | 90% | MOSERS BackDROP page |
| Maximum BackDROP period | five years | MOSERS BackDROP page |
| Federal withholding on cash | 20% | MOSERS BackDROP page |
| Possible early distribution penalty | 10% | MOSERS BackDROP page |
| Age by which a temporary benefit stops | 62 | MOSERS BackDROP page |
The page also warns about estimates: “A high COLA may overstate benefits while a low COLA may understate benefits.” It calls the estimate “an estimate and not a guarantee of benefits”. See also the lump sum versus monthly annuity break-even page.
What the pages read do not state: the actual monthly reduction percentage from choosing BackDROP, which is described only as likely, any dollar example from MOSERS, or the lump-sum amount for a particular member. MOSERS points members to its Comparison Calculator, benefit counselors and the Special Tax Notice for those answers.
Sources for this section:
- Missouri State Employees’ Retirement System, mosers.org benefit-payment-options: https://www.mosers.org/members/pension/benefit-payment-options
- Missouri State Employees’ Retirement System, mosers.org backdrop: https://mosers.org/members/pension/backdrop
What could not be verified
REFUND TERMS: this page does not state what happens to your contributions if you take a refund instead of leaving your account with the system: that comparison was not independently researched for this system this session, and is left as an open gap rather than guessed from another system’s rule. Consult your own plan’s refund/forfeiture terms before deciding. Any additional field marked “not stated” in the verdicts table above was genuinely absent from the official materials read, not omitted for space.
Sources
Read September 3, 2026.
Related public pension systems: Maryland MSRPS · Colorado PERA.
General information drawn from each system’s own official published materials, not legal, tax or financial advice. Vesting, COLA and buyback rules are set by state statute and plan tier, differ materially by hire date, and can change by future legislation. This page cannot see your own member statement, which governs. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice.